Preqin Report: Investors Going Proactive With Alternative Assets

At least 80 percent of investors in each of the alternative asset classes would maintain or enhance their allocations during 2013, according to Preqin’s report.

The 2013 Preqin Investor Network Global Alternatives Report helps investors to navigate the complex alternative assets markets. The leading data source provider for the alternative asset industry, Preqin in today’s report indicated that over 50 percent of investors surveyed in April 2013 have a proactive approach in place for sourcing their alternative investment opportunities.

In the report Preqin finds that investors showed increased optimism by remaining committed to their allocations to private equity, real estate, hedge funds and infrastructure.

Bob Jenkins in today’s post in FTAdvisor also echoed a similar view, while he focused on alternatives covering retail oriented mutual funds and ETFs. According to Bob Jenkins’ report, assets in alternatives galloped from $199 billion by posting a compound annual growth rate of nearly 28 percent over the past four years. This year alone saw an inflow of about $45 billion into alternatives.

According to Preqin’s report, 64 percent of investors have a strong internal investment team that proactively sources and examines alternative investment funds, while over 67 percent have two or more investment-focused employees dedicated to alternative assets.

As regards investment in hedge funds is concerned, according to Preqin’s report, a third of investors in hedge funds plan to increase their exposure to the asset class, while a fifth has plans to reduce their allocation throughout 2013.

In real estate investments, 93 percent of real estate investors plan to either maintain or increase their exposure to the asset class during 2013.

In the infrastructure space, 58 percent of investors with a dedicated allocation to infrastructure are looking to increase their allocation over the same time period, while 4 percent plan to reduce their exposure during the course of 2013.

Coming to larger institutional players, according to Preqin’s report, of the institutional investors that invest in private equity, a significant 59 percent will be maintaining their level of exposure throughout 2013, with an additional 27 percent increasing their allocation to the asset class.

Preqin notes that many investors are becoming more sophisticated in their proactive sourcing of new investment opportunities. However, one of the main challenges faced by investors is in identifying the most appropriate funds, before committing their funds.